Bitcoin taps on the threshold of $30,000, but what could shatter it?

Bitcoin edged closer to the $30,000 mark with a sharp rally today, but on-chain data suggests this level could provide some major resistance.

1.49 million addresses bought around the $30,000 level

According to data from Market Intelligence Platform in the blockThe most important potential resistance for BTC is at the current level. “Resistance” here does not refer to technical resistance, but to on-chain resistance.

From an on-chain perspective, levels are defined as resistance/support based on the concentration of investors/addresses that bought at said levels.

The chart below shows what the distribution of holders at different asset levels looks like right now:

Data for various on-chain resistance and support levels Source: in the block

Generally, whenever the price of an asset retests an investor’s cost basis, they may be more likely to show some type of move. If this retest occurs from below, that is, the holder was in loss before this, they may be tempted to sell at break-even.

On the other hand, a drop in price towards their acquisition value may cause them to buy more assets, as they may think that if these same levels proved profitable before, they can do so again in the near future.

The larger the group of investors whose cost base is within a specific price range, the more pronounced such effects will be. Thus, such ranges above the price can be viewed as a source of resistance, while ranges below can serve as support.

As seen in the graph above, the $29,800 to $30,700 range is particularly rich in addresses right now. More specifically, approximately 1.49 million addresses purchased their coins here.

Naturally, this means that Bitcoin may have trouble breaking above this range, as it has already done during the last year. “At the same time, 73% of Bitcoin addresses are currently in profit,” notes IntoTheBlock, “as all of the bottom ranges currently have thick green bands.”

While it will be difficult to clear the range, at least the strong support below means the cryptocurrency can continue to retest until it eventually finds a break. If BTC can indeed clear the range, it should not face much resistance at higher levels, as many investors do not have their cost base there.

A positive sign for the current rally could be the fact that it is not driven by the derivatives side. analyst X is pointed at.

The value of the metric has been decreasing in recent times. Source: @jimmyvs24 on X

In the above chart, data on the ratio between Bitcoin open interest and market cap is displayed. “Open Interest” here is a measure of the total amount of open BTC contracts in the futures market.

The value of the indicator has recently declined, meaning that Open Interest has decreased relative to market capitalization. This shows that the current rise is driven by spot buying.

btc price

Bitcoin is currently inside the key resistance range discussed earlier as its price is trading around $29,900.

The coin has seen a strong surge in value recently Source: BTCUSD on TradingView

Featured image from Shutterstock.com, charts from tradingview.com, glassnode.com

source: www.newsbtc.com